The Real Reagan (and Thatcher) Record Revisited

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MargaretThatcher and Ronald Reagan shared many common visions and personal doctrine. Do you mostly share their vision and personal doctrine? How you answered the poll is a good indication of whether your answer is yes or no.

Margaret Thatcher's passing last month refocused a lot of attention on her policies and legacy. Many praised her. Many others have not been at all kind in their assessment of her. And of course, it naturally followed that her friend and soul mate, Ronald Reagan, and his legacy would also be revisited with similar broad differences of opinion.

On another thread a member said this of Reagan:
". . . . I consider Ronald Wilson Reagan as the person most singly responsible for the undoing of the American middle class. His "tax cuts" actually moved taxation downward through the lower income groups--and his anti-labor extremism basically outlawed organized labor in the U.S. We may never again recover from the "supply side" economic scam perpetrated by Reagan. He effectively destroyed the America as we knew it, all for political success."

So what does the record actually show? Here's my argument that more freedom, more supply sided policy, and allowing the private sector keep a higher percentage of its money produces more treasury income and more prosperity for Americans and that overshadows any negatives.

From AEI:

The blogosphere’s reaction to the passing of Margaret Thatcher reminds one that left-wingers think the Thatcher-Reagan revolutions were terrible for average Brits and Americans. The rich got richer, they say, at the expense of everyone else who saw their incomes stay the same or decline. All the renewed emphasis on free-market economics did was increase income inequality (a point of view President Obama also seems to hold.)

As proof, the left points to various analyses showing median incomes rising some ridiculously small amount, if at all, since the 1960s or 1970s. Not only do such claims not pass a common-sense smell test, the data don’t support such them, as Brooking’s Scott Winship explains. I will also point to Richard Burkhauser’s research showing a 21% rise in pre-tax, pre-transfer incomes, not counting benefits. In addition, the US and UK grew faster than advanced economies that did not cut taxes and deregulate.

Reagan, Thatcher, and the myth of middle-class stagnation | AEIdeas

From CATO:

Cato Institute Policy Analysis No. 261:
Supply-Side Tax Cuts and the Truth about the Reagan
Economic Record
October 22, 1996
William A. Niskanen, Stephen Moore
William A. Niskanen is chairman and Stephen Moore is director of fiscal policy studies at the Cato Institute.

Executive Summary

Bob Dole's proposal for a 15 percent income tax cut has reignited the long-standing debate about the economic impact of Reaganomics in the 1980s. This study assesses the Reagan supply-side policies by comparing the nation's economic performance in the Reagan years (1981-89) with its performance in the immediately preceding Ford-Carter years (1974-81) and in the Bush-Clinton years that followed (1989-95).

On 8 of the 10 key economic variables examined, the American economy performed better during the Reagan years than during the pre- and post-Reagan years.

Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush-Clinton years.

Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the preReagan years; it experienced a loss of almost $1,500 in the post-Reagan years.

Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency.

The only economic variable that was worse in the Reagan period than in both the pre- and post-Reagan years was the savings rate, which fell rapidly in the 1980s. The productivity rate was higher in the pre-Reagan years but much lower in the post-Reagan years.

This study also exposes 12 fables of Reaganomics, such as that the rich got richer and the poor got poorer, the Reagan tax cuts caused the deficit to explode, and Bill Clinton's economic record has been better than Reagan's.

The whole analysis here:
http://www.cato.org/sites/cato.org/files/pubs/pdf/pa261.pdf

FROM THE HERITAGE FOUNDATION

President Ronald Reagan's record includes sweeping economic reforms and deep across-the-board tax cuts, market deregulation, and sound monetary policies to contain inflation. His policies resulted in the largest peacetime economic boom in American history and nearly 35 million more jobs. As the Joint Economic Committee reported in April 2000:2

In 1981, newly elected President Ronald Reagan refocused fiscal policy on the long run. He proposed, and Congress passed, sharp cuts in marginal tax rates. The cuts increased incentives to work and stimulated growth. These were funda-mental policy changes that provided the foundation for the Great Expansion that began in December 1982.

As Exhibit 1 shows, the economic record of the last 17 years is remarkable, particularly when viewed against the backdrop of the 1970s. The United States has experienced two of the longest and strongest expansions in our history back to back. They have been interrupted only by a shallow eight-month downturn in 1990-91.
The Real Reagan Economic Record: Responsible and Successful Fiscal Policy

AND ABOUT THAT DECIMATED MIDDLE CLASS:

The Middle Class did shrink during the Reagan years because so many of the middle class moved up into the ranks of the 'rich'. And those classified as 'poor' also moved upward into the Middle Class shrinking the ranks of the 'poor'. But because we had more middle class than we had 'poor', there weren't enough 'poor' to replace all those who moved up and out of the middle class.

The Reagan expansion years marked a period of economic progress for middle class Americans. Middle class income increased 11 percent after adjustment for inflation, while nearly 20 million new jobs were created. Nonetheless, there are those, such as Secretary Reich, who have attempted to portray the 1980s as a period of economic hardship and decline for most Americans.

This paper will rely on data from the Census Bureau to analyze the income growth of the 1980s. The evidence shows that the percentage of households in the low income category declined during the 1980s, while the proportion of high income households increased. Furthermore, while the middle class shrank as a share of all households, the reason for this is upward, not downward, mobility.
Why did the middle class thrive and have more money under Reagan? proof inside? - Yahoo! Answers

I hope some are sufficiently interested in this topic will comment here. And I hope that those who see Reagan or Thatcher as politicians who ruined their respective countries will have a reasoned argument for that point of view. And I hope all can support their opinions with something more substantive than prejudice, hatred, insults, and/or message board opinion and sound bites.

 

[Foxfyre]

Hmmm. No comments? Not even any looks? No interest? Or too much to read? Or too complicated?